The Bombay High Court has indicated that a protracted commercial dispute between fugitive businessman Vijay Mallya and a consortium of banks, led by the State Bank of India (SBI), may finally be nearing its resolution. The court has directed the Enforcement Directorate (ED) to clarify whether the settlement and asset-recovery process in the case has been completed.
This development comes after Mallya's legal representative argued that his 2020 petition, which challenged the seizure of his assets, has become largely irrelevant due to significant changes in circumstances over the past six years. Justice Milind Jadhav reportedly stated, "Actually, this issue needs to be put to an end. The idea is to move on… otherwise the relations and the economy of the country suffer."
Background of the Dispute
The core of the commercial dispute revolves around Mallya's challenge to a special Prevention of Money Laundering Act (PMLA) court order from 2020. This order had permitted the SBI-led consortium to utilize assets confiscated by the ED to recover outstanding debts related to the defunct Kingfisher Airlines.
The ED had, in February 2019, communicated to the PMLA court that it had no objection to the liquidation of Mallya's confiscated assets for loan recovery. Mallya had been declared a fugitive economic offender in January 2019, prior to his petition challenging the asset utilization.
Recovery Claims and Court Directives
A significant point of contention during the recent hearing was the total amount recovered by public sector banks. Mallya's senior advocate, Amit Desai, asserted that banks have recovered approximately ₹15,000 crore from Mallya. This figure is notably higher than the original claimed principal amount of ₹6,203.35 crore, excluding interest.
"Public sector banks keeping this matter pending is unfortunate," Desai reportedly stated, adding that "The RBI audit itself says it's an airline's business failure and nothing else. Banks have taken away ₹15,000 crore and now they say sorry. That's not good enough."
The court has instructed the ED to submit an affidavit detailing whether the settlement process has concluded and if "everything is done and dusted." The next steps in the case will be determined after hearing from the concerned ED deputy director.
Commercial vs. Criminal Proceedings
It is important to note that the Bombay High Court has clarified that bringing this commercial dispute to an end will not impact the ongoing criminal proceedings against Vijay Mallya. The court emphasized that the criminal prosecution must still be "taken to its logical end."
Mallya departed India in March 2016 amidst escalating legal pressures and has since resided in the United Kingdom. He faces multiple criminal cases, including allegations of loan defaults, fraud, money laundering, and various financial irregularities. While UK courts have approved his extradition to India, his return has been consistently delayed by further legal challenges in Britain.